SSP and directors

SSP and directors

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My client has been off work for 7 weeks with an injury.  He is a director of his own company.   Current salary £641 per month.  No other employees.  He has a genuine business with several customers, ie he is not a contractor with just one client.  He has an office, which he has been unable to get to, apart from a couple of times when his wife has taken him to check post etc.  He has been responding to a few emails and taking a few calls from home, but really only on a firefighting basis.  He has definitely missed work and opportunities as a result.

So, three questions. 

Firstly, is he really off work, given that he is still doing minimal work?

Secondly - as he does not have an employment contract, I take it he could not claim SSP in any case as he is an offoicer of the company but not strictly an employee?

Thirdly - assuming he can't claim SSP, is there anything else he can claim?

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Euan's picture
By Euan MacLennan
06th Mar 2014 12:09

So, three answers
Yes.  If he works from an office which he has only been able to visit twice in 7 weeks, I would say he is off sick, which is presumably confirmed by his Sick (Fit) Note from his doctor.No.  For SSP, the term "employee" is defined as including office holders, so he is entitled to be paid SSP, as his earnings exceed the NI LEL of £473, after the first 3 working days.  The company will be entitled to recover the entire SSP paid from HMRC (eventually), as all of it will exceed 13% of the Class 1 NICs payable of nil, but only up to 5 April 2014 when the Percentage Threshold Scheme ceases.Loss of earnings if the company is insured for consequential losses or has keyman insurance.

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By taxhound
06th Mar 2014 13:07

Thanks Euan

I was concerned because I looked here this morning:

https://www.gov.uk/employment-status/employee

My client does not have an employment contract (otherwise I believe he would have to receive the national minimum wage)

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Euan's picture
By Euan MacLennan
06th Mar 2014 15:25

Don't believe what you read on Gov.uk

It is very simplified.

If you want the real thing, read the definition of an employee on page 8 of Booklet E14 on SSP:

"Employee
For Statutory Sick Pay purposes an employee is a person whose earnings attract a liability for employer’s secondary Class 1 National Insurance contributions (NICs), or would but for the person’s age or level of their earnings.
Employees include office holders, for example police officers, Members of Parliament, the judiciary and some company directors."

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By pinkjag
09th Apr 2015 17:11

SSP for directors

directors can be considered for SSP and any statutory payment.   For a director to be contractually paid, they need to get paid the NMW - salary cant be decided based on cash flow etc. This doesn't mean if they are not a contractually paid director they dont qualify.  Regulations changed on 1st Oct 2009. Any directors appointed after this date basically means you calculate the average weekly earnings like a normal employee - regardless of not been paid the NMW.  so, iuf a director in the 2 months before sickness earns at least the LEL - £111 for 14/15 and £112 15/16, then they qualify.

  Prior to this date, if they are not paid contractually then you need to get information from the last 2 sets of accounts signed of prior to the PIW.  the salary declared on the last signed accounts gets averaged out to the date of the oprevious years accounts.  If they just earned the annual LEL but the accounts are signed more than 12 months appart - the earnings wont reach the weekly LEL - so don't qualify.  If they do get a contractual salary, then the calcuklatuion is the same as a regulare EE.

ANY woek done in a day - regardless if its at home, ior only for a short peridm, is not classed as a day of sickness and will break the period of incapacity for work (PIW)

Remember - there is NO recovery of SSP regardless of size of ER - from April 2014.  so, if a director does qualify, it's a cost to the comopany.  they cannot claim from the job centre plus until after the 28 weeks has been paid.

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By pinkjag
06th Oct 2016 13:17

he can claim SSP as an office holder is considered an employee for statutory payments - however -if he does any work, whether at home or elsewhere, this isn't classed as a day of sickness. he has to have been totally unable to work for 4 or more consecutive calendar days before you can consider SSP. Even if he did qualify, the company do not get any funding from HMRC - so it's a cost to the company.
He would need to call job centre plus to see if there is any additional benefits he could possibly apply for

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Replying to pinkjag:
Euan's picture
By Euan MacLennan
06th Oct 2016 14:30

pinkjag wrote:

Even if he did qualify, the company do not get any funding from HMRC - so it's a cost to the company.

No - it wasn't. The OP asked the question in March 2014 when recovery of SSP was still available - up to 5th April 2014, as I said in my first response.

Why are you re-visiting this question 2½ years later?

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